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Existing home sales continued to climb in February, further evidence of a continuing recovery in the housing market.

Home sales rose 0.8% in February from January to a seasonally adjusted annual rate of 4.98 million, 10.2% above last year’s level, the National Association of Realtors said Thursday.

The sales rate was the highest since November 2009 when a federal tax credit was propping up home sales.

January’s sales rate was also revised up to 4.94 million.

Total inventory, which had been dropping for months, rose 9.6% at the end of the February to 1.94 million homes for sale, a 4.7-month supply at the current sales pace. That’s up from 4.3 months in January.

Listed inventory was 19% below a year ago and the supply is especially tight in certain areas of the country, such as in the West. With limited supply, bidding wars have broken out as buyers have little to choose from and agents have little to sell.

But last month’s inventory expansion was a strong one, says Jed Kolko, economist for website Trulia.

Inventory has been tightening because construction levels are still low, adding little new housing stock, and homeowners are waiting to sell until they have more positive equity, Kolko says.

He says inventory is likely to rise now through the summer because of seasonality, bringing some relief to buyers and helping boost sales. The February jump “is an early hint that the inventory crunch may finally be easing for good,” Kolko says.

Interest rates have also edged up, climbing recently to an average of 3.82% for a 30-year-fixed rate loan, a seven-month high, the Mortgage Bankers Association said Wednesday.

But rates are still low and, along with job growth and pent-up demand, are helping to fuel stronger home sales.

For February, sales of distressed homes — foreclosures and short sales — accounted for 25% of sales, down from 34% a year ago.

Homes were on the market for a median of 74 days, 24% below year-ago levels, NAR says.

The association said the national median price for existing homes rose 11.6% from a year ago to $173,600. The February gain was the strongest since November 2005 when the median was 12.9% above a year earlier.

In a separate report Thursday, the Federal Housing Finance Agency — the regulator for mortgage-finance giants Fannie Mae and Freddie Mac — said home prices rose 0.6% from December to January. For the 12 months ending in January, prices rose 6.5%.

More up-to-date data from real estate website Zillow shows home values rose for the 16th straight month in February, up 0.1% from January and up almost 6% year-over-year.

All 30 of the largest metro areas covered by Zillow registered both monthly and annual appreciation.

“The housing market recovery has continued to gain momentum over the past several months and looks firmly entrenched as we enter the 2013 spring home shopping season,” says Zillow economist Stan Humphries.

Rising prices will “help cure” many of the ills facing the market, including big numbers of underwater homeowners. As prices rise, more homeowners will list homes for sale, which will ease supply constraints, Humphries says.

A shortage of homes for sale, especially in the lower price ranges, hurt California home sales in February, the California Association of Realtors says.

Sales of existing single-family homes there dipped 0.9% for the month from January and were down almost 6% from a year ago, CAR says.

The pace of home sales quickened in South Carolina markets where second homes are a major portion of the inventory, led by markets in Beaufort, Charleston and Hilton Head.

Increases in the number of homes sold in Charleston rose 16% to 718 homes in February, compared with February 2012; 24.6% to 86 homes in Beaufort; and 26.5% to 229 homes in Hilton Head.

In Charleston, homes also sold much quicker in February than a year earlier, with the number of days on the market shrinking 25.8% to 91 days, from 122 days a year earlier.

“It appears buyers are motivated by an attractive affordability environment, while more and more sellers are receiving near top dollar for their homes,” S.C. Realtors said in announcing the February data on Friday.

The data show a generally improving market statewide. New listings in South Carolina increased 2.8% to 8,676 homes. Pending sales were up 8.4% to 4,863 homes. Inventory levels shrank 11.3% to 45,173 units.

The presence of distressed properties, including foreclosures, short sales and real estate-owned homes, continues to add downward pressure on overall home prices. However, some industry groups argue that prices could be showing signs of stability.

According to the most recent FNC Residential Price Index, home prices continued to trend lower during the second half of 2011 as foreclosures were conducted at an elevated rate. As a result, since July 2011, the values of non-distressed properties have declined by roughly 4.5 percent at an average of 1 percent every month.

Distressed property sales accounted for an estimated 27 percent of all transactions in February 2012. While this is still an elevated share, it is significantly less than the 32.2 percent share reported a year earlier.

At the end of last year, the report noted the median price discount of foreclosures amounted to 18.4 percent, making the prospect of owning a home more affordable to entry-level buyers. While major bargains can still be obtained, the discount was 1.8 percent higher during the previous three-month period and was 1.2 percent higher during the fourth quarter of 2010.

However, as these affordable prices continue to attract a significant number of buyers, a recent report from CoreLogic says than an elevated sales rate is working to stabilize home prices.

In February, the firm found that overall home prices fell just 0.8 percent, compared to 2 percent just a year earlier. While this figure includes the prices of distressed homes, when excluding these properties, values actually appreciated 0.7 percent in February from the previous month.

“The continued strength of sales activity and tightening inventories in many markets are early and hopeful signs that prices will continue to stabilize and improve in the coming months,” said CoreLogic president and CEO Anand Nallathambi. “In fact, nondistressed home sale prices, which represent two-thirds of all sales, have appreciated by just over 1 percent since the beginning of the year.”

While overall home prices continued to edge lower, the pace is much slower than it has been in previous years. As a result, the Mortgage Bankers Association reported an increase in home loan activity during the week ending March 30 of buyer capitalized on bargain prices to become homeowners.

The industry group’s Weekly Application survey found that application activity surged 4.8 percent from the previous week. In addition, as mortgage rates continue to hover near all-time lows, the refinance share of activity spiked 4 percent.

“Applications to buy a home picked up last week, and are running more than 2 percent above the level reported at this time last year,” said MBA vice president of research and economics Michael Fratantoni. “Home purchase applications for conventional loans are now about 10 percent above last year’s level. Applications for government loans increased by more than 10 percent over the week, for both purchase and refinance, likely spurred by borrowers seeking to apply before scheduled increases in FHA mortgage insurance premiums at the beginning of April.”

Meanwhile, in the wake of the surge in application activity, the average interest rate for a 30-year fixed-rate mortgage with a conforming loan balance of less than $417,500 dipped to 4.16 percent. The previous week the rate stood at 4.23 percent. In addition, the report found that the rate for a 30-year FRM jumbo loan also declined, falling to 4.46 percent.

WASHINGTON — Fannie Mae and Freddie Mac will build a new joint company for securitizing home loans as a stepping stone toward shrinking the government’s role in the mortgage market, the regulator of the U.S. government-controlled firms said on Monday.

“The overarching goal is to create something of value that could either be sold or used by policymakers as a foundational element of the mortgage market of the future,” Edward DeMarco, acting director of the Federal Housing Finance Agency, told the National Association for Business Economics.

Fannie Mae and Freddie Mac, which were bailed out by the government in 2008, help finance about two-thirds of new U.S. home loans. DeMarco is seeking to shrink their footprint and reduce risks to the taxpayers that support the mortgage giants.

Since they were seized by the government, the companies have drawn nearly $190 billion from the U.S. Treasury to stay afloat.

By creating a new securitization company, FHFA intends to pave the way for a single securitization platform and force Fannie Mae and Freddie Mac to abandon their separate systems.

The aim is to shrink the role the two government-sponsored enterprises play in the housing system in the absence of legislation from Congress or direction from the Obama administration on their future.

DeMarco said the goal is to build a single infrastructure to support the mortgage credit business.

The new company will be structured as a joint venture that is owned by Fannie Mae and Freddie Mac, DeMarco told reporters on a conference call to discuss FHFA’s plans.

He said the new joint venture is not expected to begin securitizing loans next year. Instead, the focus will be on creating the business and hiring staff. The company will have a separate chief executive and board.

DeMarco expects Congress will ultimately decide how the securitization platform is operated and whether it should be privatized.

“We are on a path to replace the outdated proprietary operational systems of Fannie and Freddie,” DeMarco told reporters. “It could be turned to some form of a market utility.”

Fannie Mae and Freddie Mac do not directly make loans. They provide financing to banks and lenders by purchasing mortgages, which they either keep on their books or package as securities which they then sell to investors with a guarantee.

DeMarco, in laying out FHFA’s goals for 2013, said he also plans to start reducing Fannie Mae and Freddie Mac’s role in the housing finance system by shrinking their business by 10 percent in the loan market for multifamily homes.

Fannie and Freddie will also aim to complete $30 billion in single-family credit guarantee business in 2013, sharing some of the risk with the private market. Those transactions could include mortgage insurance or other types of debt securities.

The companies will also be required to reduce the less liquid portion of their portfolio of mortgages by 5 percent next year. This goal comes on top of an existing mandate that requires Fannie and Freddie to shrink their investment portfolios over time and turn over profits to taxpayers.

Fannie Mae and Freddie suffered years of losses after the U.S. housing bubble burst, but have returned to profitability thanks to an improving housing market and their success in reducing their portfolios of poorly performing loans.

Even though the loans they have backed recently are performing well, DeMarco noted that the market was still “reliant on federal support, with very little private capital standing in front of the federal government’s risk exposure.”

Republicans and Democrats agree that Fannie Mae and Freddie Mac should eventually be wound down, but they have yet to find common ground on how to replace them.

The guy had street cred. He lived in Florida’s belly, close to Orlando. He wasn’t far from the truth either. Heat rains down on Fort Jackson, and mugginess steams up from ancient sands. Too far from the Atlantic to catch sea breezes and too flat to enjoy alpine air, Columbia bakes.

Motorists passing through miss the heat a lot more. Columbia, South Carolina, is one of but ten cities with three interstates threaded through it. Heading south, I-77 flirts with Columbia’s eastern edge. This stretch of interstate sits midway between New York City and Miami; just to their east sits the country’s largest basic training center, Fort Jackson.

The famous and the unknown, the driven and drifters, have bonded at Fort Jackson with singular purpose: preserving freedom. Fort Jackson trains half the country’s soldiers in basic combat training, about 45,000 a year. This coming together of men, women, and machines in peace and war makes a fort a breeding ground for history. While the fort’s mainstream history—key dates and events—are documented, the colorful fragments and minutiae hidden in the fort’s great heap of days require a bit of effort.

I find myself drumming up clichés … Bugle calls at sunrise, synchronized boots, the crumpled concussions of artillery, and drill instructors barking out commands. Think of a bustling military establishment, and you don’t envision old family cemeteries, archeological sites, endangered species, time capsules, TIME magazine, and tragedies and plagues. Yet all these are part of Fort Jackson’s fabric. You’d never give the flagpole at headquarters’ much thought. A gift from New York Mayor Fiorello LaGuardia, it stood at the 1938 World’s Fair in New York City. And that is but one jewel of the life, liberty, and lore flowing from this ancient-but-militarized seabed.

Karma attends the land where the fort sits, a sandy region of old river deposits and primordial ocean floor. The porous, absorbent soil here does not change into mud after heavy rain, a good thing. Once part of Colonel Wade Hampton’s estate, the land, it seems, was destined for military use and fated to bear Andrew Jackson’s name to whom Hampton was an aide at the Battle of New Orleans.

1916 … a cold January rain falls as military and civilian planners climb a sandy knoll overlooking pineland six miles east of Columbia. The planners’ mission is crucial to the War Department: evaluating a site for a US Army training center. The site is good, and the Columbia Chamber of Commerce raises $59,000 to turn the Hampton Estate over to the government.

On June 2, 1917, a new Army training center was established to train fighting men in the early, ominous days of World War I. This installation would become the largest and most active of its kind in the world. Hardaway Contracting Company of Columbus, Georgia, won the award to build the Sixth National Army Cantonment, to be named Camp Jackson. In six months, Hardaway built a city of 1,519 buildings that included theaters, stores, kitchens, barracks, officers’ quarters, training facilities, stables, warehouses, garages, an airfield, roads, bridges, railroads, a reservoir and water lines, sewers, wells, heating plants, and a laundry. Overnight, Camp Jackson changed from a sandy, pine and scrub oak forest to a thriving Army training center, complete with a trolley line and10,000 men. Two years later, Camp Jackson would boast the country’s largest government-operated laundry.

Tragedies

On 21 November 1917, a meningitis epidemic broke out. By December 11, 12 persons had died and the camp’s labor force deserted en masse. Troops worked tirelessly in subfreezing temperatures to finish essential work. Then influenza struck. By the time the plague ran its course, 300 had died. On the morning of May 10, 1918, three cars of a troop train left the tracks as it started across the trestle where the railroad entered Camp Jackson. Nine soldiers died.

Achievement

Corporal Freddie Stowers of Sandy Spring, South Carolina, the grandson of a slave, was the only black Medal of Honor recipient from World War I. Two bursts from German machineguns hit Stowers as he led a battered squadron in an assault on Côte 188, a tall, heavily defended hill overlooking a farm near Ardeuil, France.

Some men achieved fame for their civilian accomplishments. One hot night, two lieutenants, Briton Hadden and Henry Luce, walked back to their barrack discussing “a paper” they would found. They wanted to dispel some of the ignorance they saw in many of their fellow recruits. From that discussion came TIME magazine.

The early years saw growth and accomplishment, the end of World War I, and then nothing. Camp Jackson was abandoned April 25, 1922 pursuant to General Orders No. 33, War Department. The roads disintegrated, and pine and scrub oaks reclaimed the ancient seabed.
—
In November 1939, Hitler’s Blitzkrieg swept across Europe. In July 1940, Camp Jackson became Fort Jackson and trespass rights were acquired on 265,000 acres in Richland, Fairfield, and Kershaw Counties for military maneuvers. It was the largest block of property ever handled in one single transaction in South Carolina at the time. Of the 2,000 landowners, 1,300 lived in Richland County.

Men poured into the fort and tanks arrived. A half million Americans received some part of their training at Fort Jackson during World War II. Some men blazed their way into history as members of the 4th Division, one of the first to hit the beaches of France. Many were boys who grew into men at Fort Jackson. Sixty-three years after World War II, you cannot stand in a World War II barrack and not be humbled. The wood flooring of Building 4408 seems beleaguered. It’s worn. Armies literally passed over these original pine floors, up at reveille to form up.

A Ghostly Presence

For those within earshot of the fort, the sounds of men forming up have long floated through early morning air. James Dickey described fort mornings for Esquire in 1981. “The dock from which I sight the noon and the moon is on the west bank of a famed lake on the other side of which is Fort Jackson, a basic training installation which is among the largest in the world. With daybreak each day comes the sound of firing, of voices marching in unison, of bugles, of militaristic hymns, as though coming from a ghostly takeover army waiting for the day.”

The soldiers marching in unison, learning warfare and takoever are a major part of history, and celebrities and world leaders have rightfully come to pay homage to them. Betty Grable, Life cover girl, came. So did Bob Hope. On June 24, 1942, Winston Churchill stepped from a train at Fort Jackson. Watching the thousands of recruits undergoing training, Mr. Churchill said “they’re just like money in the bank.” General Jimmy Doolittle came to Fort Jackson in 1992 and 1993. President Roosevelt twice visited the fort. President George W. Bush delivered a 20-minute speech, opening his remarks with a loud “hooah,” that familiar Army sentiment conveying “can do” or “good job.”

A Blend Of Old & New

The fort’s training techniques and equipment are the latest. Still, you can’t change history without the past having a firm hold on you. There’s a relic—what looks like a huge stone on a sturdy pedestal near the fort’s museum. It’s a remnant of the Ludendorff Bridge at Remagen—the last standing span over the Rhine during World War II. Said General Eisenhower, “the bridge is worth its weight in gold.”

American soldiers captured the bridge March 7, 1945, and the psychological advantage of having crossed the Rhine in force in pursuit of fleeing Wehrmacht troops bolstered Allied forces’ morale while destroying the Germans’. On March 17, 1945 the bridge collapsed, killing twenty-eight American soldiers. The chunk at the fort museum weighs 900 pounds, worth $6,500,000 today according to Eisenhower’s quote.

The fort conducts operations on many fronts. Its Environmental & Natural Resources Division manages more than 50,000 acres of forest, endangered plant species, and habitat for the red cockaded woodpecker. It oversees old family cemeteries and several archeological sites.

A time capsule lies at the foot of the Jackson Statue at the fort’s main entrance. Eight years from now, the capsule will be opened. The contents should prove insightful as to how fast time passes. In the early years, horses were common at the fort. In fact, about 800 horses stampeded and destroyed a number of themselves. Today, the fort is holding hydrogen power trials as the nation looks to lessen it dependence on the horsepower oil provides.

Today’s fort is a hustling, bustling place, and yet it maintains a sharp focus on its mission: training 50 percent of all new Army personnel, as well as all Army drill sergeants, all the chaplains in the Armed Forces, and certain Navy personnel.

Fort Jackson is a far-flung, complex institution that far transcends what was envisioned for Camp Jackson. Those planners who stood atop a sandy knoll back in 1916 would be amazed to see what they wrought.
Perhaps some of you trained there. Perhaps you, too, feel it is Hell on earth, the hottest place around. Perhaps you trained with friends here who are no longer with us. Perhaps you harbor emotions not so easily explained. A fort is always attended by a multitude of perhaps …

One thing is certain. Fort Jackson remains the only army base in the United States within a city, and a hot city it is come summer—the kind of city where you can train an army for most anything. Vietnam, the Middle East, most anywhere. Many motorists speeding along I-77 won’t know that, however, unless they happen to spot the signs, unless they went through basic training here. They, then, will remember those days.

They will recall that this is the place where “at daybreak each day comes the sound of firing, of voices marching in unison, of bugles, of militaristic hymns, as though coming from a ghostly takeover army waiting for the day.”

Tom Poland is the author of six books and more than 700 magazine features. A Southern writer, his work has appeared in magazines throughout the South. The University of South Carolina Press just released his book on how the blues became the shag, Save The Last Dance For Me. He writes a weekly column for newspapers in Georgia and South Carolina about the South, its people, traditions, lifestyle, and changing culture.

Pending sales of residential properties in South Carolina climbed 21.8% in January compared with the same month in 2012 while median sales price budged just 0.3% to $145,000, according to the S.C. Realtors Association.

The Columbia-based organization, which tracks residential properties, added that new listings in the state rose 1.5% to 8,859 dwellings.

The number of sales that closed in January rose 17.1% in a year-over-year comparison while the number of days a home was on the market dropped 9.3% to 129 days compared with 143 days for January 2012.

Among the state’s metro areas, Columbia recorded the largest increase for the month in the sales of residential homes, condos and villas, the association said.

Columbia sales jumped 23.3% to 524 homes in January compared with 425 units for the same month in 2012. However, the median price for the market dropped 8.4% to $132,200 from $144,250 in January 2012, and the average number of days a home was on the market increased 4.5% to 116.

The Greenville market recorded a 17.6% increase in sales for January with 502 homes compared with 427 units for the same month in 2012. Median home prices in Greenville rose 1.5% to $146,580, while the average number of days on the market dropped 6.6% to 98.

In the Charleston trident market, sales rose 15.9% to 634 homes in January while the median price rose 2.2% to $182,500. Charleston recorded one of the heftiest drops in the number of days a home was on the market, falling 23.1% to 89 days.

Only two markets in the state — Hilton Head Island and Western Upstate — recorded a drop in home sales for January. The Hilton Head area declined 0.9% to 218 homes while Western Upstate dropped 1.2% to 166 units.

In the Midlands, the Sumter/Clarendon market saw sales increase 23.9% to 83 homes while the Southern Midlands — mainly Orangeburg County — recorded a 30.8% increase for the month to 17 homes.

The Hilton Head area remained the most expensive market with the median price rising 2.8% to $245,500, while the Southern Midlands market had the lowest median price at $79,950.

Looking ahead, the association noted that while interest rates are edging higher in some regions of the state, prices are relatively stable.

The Midlands is off to a strong start in 2013 with more homes selling and the number of homes on the market returning to more normal levels. Some key highlights from the S.C. Realtors January report:
23%
What it is: Increase in home sales in Columbia in January, compared with the same month last year.
How it compares: At 524 homes sold for the month, that’s nearly 100 more than January last year and nearly 175 more than sold in January 2011.
What it means: This solidifies the real estate recovery in the region in a month that typically is slow on sales leading into the traditional spring selling season. After a dismal 2011, the yearly increase in 2012 was 17 percent.
32%
What it is: Increase in the number of pending sales – homes that are under contract but have not yet closed – in the Columbia area in January, compared with January 2012.
How it compares: At 707 homes pending closing, that’s about 175 more than this time last year and 275 more than this time in 2011.
What it means: Strong pending sales are an indicator that future months will have big sales gains because many of those sales that are pending now will closed by then.
$132,200
What it is: Median sales price for all homes that sold in the Midlands in January
How it compares: That’s 8.4 percent below the median price in January 2012, which was $144,250.
What it means: The drop could be an indication that sellers are dropping their asking prices to get rid of homes that have been sitting on the market or that they need to sell quickly. It also could mean sales have picked up for homes in the lowest price ranges. It’s the lowest monthly median price since March 2011.
9.9
What it is: The months supply of inventory on the Columbia market in January.
How it compares: It’s a 25 percent drop from January 2012, when the market had more than a year’s supply of homes for sale. The supply level peaked in April 2011 with a 16.6-month supply.
What it means: The sharp drop in inventory brings the market back toward a level playing field for buyers and sellers in what has been a buyers’ market for years. Once the number hits about six months, the market will be considered balanced.
What’s hot now?
The hottest home sales categories for January in the Columbia area included:
• Homes in the $100,000 and below and $200,001 to $300,000 price ranges
• Homes with two or fewer bedrooms and four bedrooms or more
• Condos and single-family homes
S.C. stats
Home sales
Jan. 2012: 2,950
Jan. 2013: 3,454
Change: +17%
Median price
Jan. 2012: $145,000
Jan. 2013: $145,500
Change: +.3%
Of note: Only two areas had small home sales declines, including the Hilton Head Island area and the western Upstate. Seven out of 16 regions in the state saw declines in median sales price. Faring worst was Cherokee County.

One year ago, I wrote: “Even the best possible 2012 won’t get us halfway back toward normal.” That turns out to be true, but barely: the latest Trulia Housing Barometer, for October, showed us that the market is 47 percent back to normal. And this year, we launched the Trulia Price Monitor — which revealed back in March that asking prices were on the rise — one of the earliest indicators of the home-price recovery. All in all, the housing market enters 2013 with strong tailwinds, but that could change.

OUT: Will Home Prices Bottom? IN: Will Inventories Bottom?

The big question this year was whether home prices had finally hit bottom. We now know the answer is a resounding “yes.” Every major index shows asking and sales prices rising in 2012.

The key question in 2013, though, is whether prices will rise enough so that for-sale inventory — which has fallen 43 percent nationally since the summer of 2010 — will hit bottom and start expanding again. The sharp decline in inventory was a necessary correction to the oversupply of homes after the bubble, but now inventory is below normal levels and holding back sales, particularly in California and the rest of the West.

Gallery: Real Estate 2012: The Year Housing Finally Bounced Back

Rising prices should lead to more inventory for two reasons: 1) rising prices encourage new construction, and 2) rising prices encourage some homeowners to sell. The big question for 2013 is whether today’s price gains will continue strongly enough to encourage builders to build and homeowners to sell.

Why it matters: More inventory will lead to more sales and give buyers more homes to choose from.

OUT: Robo-signing Settlement; IN: New Mortgage Rules

In February 2012, 49 states and five large banks agreed to the $25 billion robo-signing settlement, which funds loan modifications, compensations and other programs. It was intended, in part, to punish banks for their foreclosure practices, but wrongfully foreclosed-upon consumers received very little money and some states have diverted their settlement funds from housing toward other purposes.

In 2013, the big housing-policy drama will be trying to prevent a future housing crisis rather than dealing with the last one. The Consumer Financial Protection Bureau will announce new mortgage rules in January to define which mortgages are judged to be beyond a borrower’s ability to repay and would therefore trigger legal and financial implications for lenders. These rules will need to strike a delicate balance between protecting consumers from the types of high-risk loans that contributed to the last crisis and giving lenders the incentive to expand mortgage credit.

Why it matters: New mortgage rules will determine whether mortgage credit remains tight or finally starts to become more available to people who want to buy a home.

The huge price declines before 2012 and record-low mortgage rates in 2012 have made owning a home 45 percent cheaper than renting, according to the Summer 2012 Trulia Rent vs. Buy report. In fact, homeownership is more affordable than renting in even the priciest markets — such as Honolulu and New York — even without the tax breaks for homeowners.

However, now that home prices are rising faster than rents in most of the largest markets, the affordability tide is starting to turn. Furthermore, prices and rents are rising in many expensive markets, such as San Francisco, Miami and Seattle, reducing affordability for everyone. Rising mortgage rates, which consumers and forecasters expect next year as the economy strengthens, would also reduce affordability in 2013.

Why it matters: Worsening affordability will put homeownership out of reach for more households — especially in the most expensive markets.

You might be asking, how does expanding refinancing relate to cutting the mortgage interest deduction? Both are housing policies under debate that aim to serve broader economic goals. Refinancing helps stimulate the economy because it gives homeowners more spending money, one of President Obama’s priorities in 2012. Cutting the mortgage interest deduction, which costs the federal government more than $100 billion annually in revenue, would help narrow the federal budget deficit — and the top economic priority in 2013 is dealing with the federal budget without wrecking the economy (think “fiscal cliff”).

Both Democrats and Republicans are considering a cut in the mortgage interest deduction, either through capping overall deductions, lowering the rate at which deductions are taken or converting the deduction into a credit.

Why it matters: Reducing the mortgage interest deduction would make homeownership more expensive, which would reduce home values, especially in high-cost housing markets.

OUT: National Housing Policy; IN: ‘Localized’ Housing Policy

There are plenty of national housing issues to deal with, such as the new mortgage rules (see above) and the future of housing giants Fannie Mae, Freddie Mac and the Federal Housing Administration. But many critical housing issues are local and therefore only fixable by city or state governments.

Foreclosures are no longer a national problem: the foreclosure inventory is concentrated in states with a slower, “judicial” foreclosure process — such as Florida, Illinois, New Jersey, and New York — where some are calling for state-level foreclosure reform. Affordability isn’t a national problem either, but it’s a severe local challenge in San Francisco, New York and other big, coastal cities, often aggravated by rules that limit new housing construction.

Even some national policies, like Fannie Mae and Freddie Mac’s guarantee fees and conforming loan limits, are “localized”: They vary geographically to reflect differences in state legal processes or housing prices. It’s a sign of recovery and return to normalcy that the national housing crisis is becoming a range of diverse, localized housing challenges.

Why it matters: Housing policy will be more tailored to local issues, and less constrained by political gridlock in Washington — so long as cities and states rise to the challenge.

Jed Kolko is the chief economist for online listing site Trulia. This article was originally published on the Trulia Trends blog.

Most of the top homebuilders in the Midlands chalked up major increases in the number of homes built in 2012, with Mungo Homes leading the pack with an 84% increase, to 518 homes built in 2012 from 281 homes built in 2011.

Positive factors
Economist Joseph Von Nessen cited factors that will continue to be positive for home sales in South Carolina.

Pent-up demand. In 2007, the growth in household formation was 1.3%. It dropped to 0.7% between 2008 and 2011. The members of these would-be households have been having trouble finding jobs. As new jobs are created, they will eventually buy homes.
House price appreciation is South Carolina continues to get stronger. The Federal Housing Finance Agency recently reported the third consecutive quarter of appreciation in South Carolina. Greenville has now shown appreciation for the first time since 2007. The current year-over-year increase may also signal that consumers are becoming less price sensitive.
The biggest single-year gain in home prices has come in the last 12 months.
Competition from existing home sales on price alone should ebb, as homeowners grow more willing to lower prices on homes they have lived in for many years, especially if they are facing a job-related relocation.

In a year-end report on 2012 building activity, data supplied by the Home Builders Association of Greater Columbia showed that the region’s biggest builders substantially increased their activity last year.
But a chart of the top 20 builders in the region shows that six of those builders actually built fewer homes last year than they did in 2011.

Two of the top 20 builders, however, built no homes in 2011, but rebounded in 2012: CF Evans & Co. Construction built 46 homes, while JJ&Z Builders built 14 homes.

Joseph Von Nessen, an economist with Resh Marketing Inc., said in the report that while recent trends have been tough on South Carolina homebuilders, there are signs of an improving outlook.

“Since 2009, the bulk of our recovery has come in the non-summer months,” Von Nessen said. “One can easily see this by looking at the unemployment rates, which has tended to rise in the summer months and fall in the spring and fall. Housing is seasonal, with the bulk of sales activity coming in the summer.”

Because the housing sector has not yet fully rebounded in South Carolina, Von Nessen said, the growth that would otherwise occur in the summer is not happening. As a result, the state has seen relatively low amounts of economic growth in the summer since the economic crisis in 2008.

He cited factors, however, that will continue to be positive for home sales including pent-up demand, strengthening of home price appreciation and the ebb of competition from existing home sales on price.

Goodbye, Great Recession.
Hello, housing recovery.
After years of stagnation, Midlands builders are gearing up to finish neighborhoods that sat half-full for five years as the Great Recession and its aftereffects raged. They also are building new neighborhoods in hot spots throughout the region.
But home buyers will benefit from a “super-competitive environment” among builders that promises to heat up in Columbia in 2013.
“There’s only one thing that matters to the new home buyer today, and that’s price,” said Wade McGuinn, owner of McGuinn Homes in Lexington. “But once they settle on the price, they want everything. … It’s whoever can give it to you.”
Builders are planning to give buyers whatever they want this year – from central vacuums in $150,000 houses to a pick-your-own amenities list – as they build on their success in 2012 and the Columbia real estate market starts to bounce back.
From small, family-owned operations like McGuinn Homes to large national companies like D.R. Horton, builders are bullish on the Midlands market this year.
“They feel good about the Columbia market going forward,” said Earl McLeod, executive director of the Home Builders Association of Greater Columbia. “We would certainly agree. We feel better about it than we have in the past few years.”
And home buyers can expect the stiff competition to make sales to bring them better deals and more extras in a market where they already are in the driver’s seat.
“They’re going to shop ’til they drop to make sure they get the best $141,000 they can get” if that’s their price point, McGuinn said. “A luxury buyer now wants a value, and a value buyer wants a better value.”
‘Goal is to be … No. 1’
D.R. Horton is one of the builders expanding in the Midlands, buying hundreds of lots in the Columbia market.
From Cobblestone Park in Blythewood to Eagle’s Rest in Chapin, the builder is entering at least a half-dozen neighborhoods with prices ranging from $150,000 to $500,000 and above.
“As we see a good value, we purchase (lots),” said Doug Brown, president for the company’s Charlotte-Columbia division. “We think it’s a good market.”
The national builder took out permits to build 93 homes in the Columbia market in 2012, according to a permit report from the Home Builders Association of Greater Columbia. That ranked it seventh in local market share.
“Our goal is to be the No. 1 builder in the Columbia market,” Brown said. “We do want to be the best-value and the best-quality home builder in the Columbia market.”
Horton faces stiff competition, from a range of other builders boosting their construction. Permits for new homes in the Midlands rose 25 percent last year from 2011, one of the worst years on record for real estate in Columbia.
Mungo Homes, currently the top builder in the market, took out 518 permits for new homes last year, up from 281 in 2011 – an 84 percent increase.
McGuinn Homes, fifth in market share, took out 186 permits, a 75 percent increase over 2011. Wade McGuinn says he plans to grow his company by at least another 25 percent this year with development spreading from his stronghold in Lexington to Southeast Columbia, Kershaw County, Northeast Richland and the Dutch Fork area.
And Fortress Builders, started in 2010 by Bill Sinnett and Tim Kearn, took out 92 permits in 2012 – a 119 percent increase over 2011.
“We’re getting pretty aggressive,” said Sinnett, who expects to grow another 40 percent this year.
Once idle, now busy
Sinnett cited Hunter’s Run in Blythewood, where several companies are building homes, as an indication of the upswing in new construction.
The neighborhood – where prices range from the $190,000s to the $280,000s – had been sitting idle for close to seven years, he said.
“We were one of the first builders in there” in 2012, Sinnett said. “And we’ve done really well.”
Fortress also is building in Chapin and Lexington, and will build a new neighborhood of its own on Langford Road in Blythewood this year with more than 100 lots and prices ranging from the $170,000s to the $250,000s.
Being tenacious and coming up with innovative products are the ways to be competitive in the marketplace, Sinnett said.
All of Fortress’ homes come with central vacuums, a feature previously reserved for $300,000-plus homes, Sinnett said. “We’re putting it in a $150,000 house.”
Buyers also now are getting premium features, such as hardwood floors and crown molding, in lower-priced homes, he said.
Coupled with interest rates that have been historically low for at least a year, “the best time to buy a house is now because it’s not going to get much better,” Sinnett said.
‘Mom and pop … just gone’
A recovery in the housing market would be a big boost to the local economy. Home building is labor intensive. But home building creates jobs in other areas as well — from lending to attorneys’ fees to furniture and appliance sales.
Builders, however, will face challenges in the years ahead – from tighter lending rules for lot development to the slowly growing economy – that could end up narrowing options for home buyers.
“We are, technically, out of lots in Columbia,” McGuinn said. “It creates a whole other layer of financial difficulty. There are not going to be people out there building lots for builders” like there were in the boom days of the local housing market from 2004 through 2007.
The scarcity of new subdivisions means small builders – many of whom already have exited the market – will have to have their own funding to build lots because lenders still see real estate development as too much of a risk, McGuinn said.
“The barrier to being in our business has gotten so high,” he said. “Every day, (it) gets higher.”
Large banks, for example, will not lend less than $10 million to builders and even regional banks set the minimum at $4 million, McGuinn said. That refusal to make smaller loans will push out smaller builders, who lack their own financing, he said.
“The mom-and-pop operation is just gone,” he said.
‘Not a boom’
In 2006, the Top 12 builders in the Midlands all took out more than 100 permits each. In 2012, only the Top Six builders did.
The struggling economy also will be a factor in the recovery, McLeod said.
While the jobless rate in South Carolina has been declining steadily in recent months, it still is an elevated 8.3 percent and many still are struggling to find work. Still, the rate is down significantly from its peak of 12 percent in late 2009. And as more people have found work, they have jumped on ultra-low interest rate and good deals on homes.
Sales for all homes in the Columbia area rose to 6,990 through the first 11 months of 2012, up 18 percent compared to the same period in 2011, according to the S.C. Realtors trade group.
But some are still hesitant as the national economy wobbles unsteadily.
“We thought the looming fiscal cliff would be resolved, and it’s only, in many ways, been delayed so that still is a big question mark going forward in terms of the housing recovery,” McLeod said.
While Congress and the White House reached an agreement to avoid tax increases that would have kicked in at the beginning of the year, they delayed decisions on massive spending cuts.
“Put that aside … and the conditions are in place for a continued recovery, not a boom-type environment but certainly a steady increase,” McLeod said.